Question

Suppose a hotel has annual fixed costs applicable to its rooms of $2,000,000 for its 300-room hotel. Average daily room rents are $50 per room and average variable costs are $10 for each room rented. It operates 365 days per year. If the hotel is completely full throughout the year, what is the operating income for one year?

a. 1,280,000

b 2,380,000

c. 4,380,000

d. 3,180,000

Answer #1

a. The Troy Co. has the following information available: Total
fixed costs $400,000 Expected sales (units) 100,000 Selling price
per unit $10.00 Contribution margin per unit $7.50 Tax rate 30%
What is the after-tax net income? Question 1 options: $350,000
$280,000 $420,000 $400,000
b.
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